The CEO should not be the only one focused on the whole enterprise.
Yet, the status quo is most leaders operate with a functional mindset, meaning looking narrowly at their job, department, or function.
Only 14% of leaders embrace an enterprise mindset, meaning looking at the entire enterprise holistically, according to Korn Ferry.
Why? There is a lack of emphasis about the importance of or how to cultivate an enterprise mindset. It’s hard for leaders to embrace a mindset they don’t intentionally practice.
In the earlier part of a leader’s career, they are often rewarded for what they produce. This results in not developing skills or being rewarded for enterprise thinking.
Once leaders become executives, overusing a functional mindset presents significant challenges. When everyone on the C-Suite is stuck in a functional mindset, silos become the norm. At the extreme, competition between functions and resource hoarding is rampant. Leaders fighting for their functional areas have a negative cultural impact on the organization.
As leaders rise in the organization, their ability to look and contribute cross-functionally becomes increasingly important. Though executives don’t need expertise in every area of the business to cultivate an enterprise mindset, they must view the broader perspective and make decisions for the greater good. Leaders who collaborate to accomplish goals have a lasting positive cultural impact across the organization.
The Difference Between Functional vs. Enterprise Mindset
To demonstrate the difference between operating significantly with a functional versus enterprise mindset, consider the following example. The C-suite has identified too many priorities to be able to realistically accomplish in the next year.
If everyone in the C-Suite is stuck in a functional mindset about prioritization, challenges include:
- Individual functions fight for and defend their priorities, based on the rationale of only what is best for their function.
- Attempts at prioritization occur in one of two extremes: Either, all initiatives are considered a priority, with nothing getting accomplished. Or, priorities shift every time the senior leadership team meets, with no clear roadmap forward.
- Executives define success as meeting functional priorities and goals, even if it creates inefficiencies or conflicts across the organization.
- The organization’s overall strategy is fragmented, with overlapping or competing initiatives across divisions.
In contrast, when everyone in the C-Suite brings an enterprise mindset to prioritization, benefits include:
- Each member of the C-Suite considers the C-Suite their first team, with their function second. They view each other as peers who collaborate for the greater good of the organization, not as competition.
- The senior leadership team evaluates and makes prioritization decisions strategically through a meta view: considering people, talent, resources and priorities from the enterprise level.
- Senior leaders define success as meeting enterprise priorities and getting the best outcome for the organization.
- The organization’s overall strategy is integrated and cohesive, with a clear roadmap they seamlessly accomplish.
The higher a leader rises in an organization, the less effective a purely functional mindset becomes. While it’s appropriate to view decisions that impact only one area of the business through a functional lens, leaders must increasingly think and act across the enterprise.
How to Cultivate an Enterprise Mindset at Every Level
Workers and leaders at every level of the organization can cultivate an enterprise mindset; it’s not reserved for executives. The executives’ role becomes to model operating with an enterprise mindset and establish company-wide strategies to focus on building enterprise thinking.
1. Place the customer at the center
Placing the customer at the center of every decision naturally expands leaders’ thinking from functional to enterprise-wide. Customers have the best experience when the company operates as one entity. That perspective can help leaders do the same. When leaders focus on the full customer experience, they see the organization as an interconnected system.
2. Establish shared goals and promote cross-functional collaboration
One way to build enterprise thinking at every level is by creating shared goals and cross-functional teams. When individuals align with and contribute to broader goals between functions, they operate with an enterprise view. Furthermore, promoting cross-functional teams to solve problems encourages enterprise focused decision making.
3. Reinforce enterprise thinking with psychological anchors
Developing an enterprise mindset requires reinforcement for thinking beyond one’s function. Use psychological anchors to create tangible and visible cues to remind team members to think broadly and beyond their function. Examples to use during meetings: a physical object representative of the enterprise, an empty chair to represent the customer, or a statement the leader says once everyone is in the meeting.
Reflection: What’s one behavior or shift you want to cultivate to lead with an enterprise mindset?
When leaders operate with an enterprise mindset, the entire organization becomes healthier and more connected. Collaboration strengthens, decision-making improves, and resources are used more effectively. Strategy execution becomes smoother. Leaders are aligned around what’s best for the organization as a whole, not just their area.
Ultimately, leading with an enterprise mindset creates a successful organization throughout, from financial performance to employee engagement to customer experience, to innovation.
